Union ratifies severance agreement with Electro-Motive

Ontario workers will receive three weeks’ pay per year of service, $1,500 bonus

02/23/2012|labour-reporter.com|Last Updated: 02/23/2012

The severance deal reached between Caterpillar Inc. and its unionized workers at the recently closed Electro-Motive Canada (EMC) plant in London, Ont. has been ratified.

Members of Canadian Auto Workers (CAW) Local 27 voted 95 per cent in favour of accepting the deal. The 465 workers will receive three weeks of pay per year of service with no cap, as well as a $1,500 lump-sum bonus and limited health-care benefits. The union will also receive a $350,000 payment to settle unresolved grievances and cover other costs.

Individual severance amounts will range from about $13,000 (with three years’ service) to approximately $148,000 (after 17 years’ service), according to Caterpillar.

“While it is regrettable not being able to reach an agreement with the union that would have sustained the London plant, EMC is pleased that the parties were able to successfully negotiate a generous severance agreement for represented employees,” an official release from Caterpillar reads. “We wish them all the best for the future.”

Workers were locked out of the assembly plant in late January after they refused to accept a new agreement being proposed by the company. The terms of the agreement would have seen some wages reduced by 50 per cent, according to the CAW.

Caterpillar announced the closure of the plant one week after imposing the lockout, citing prohibitive costs and unsuccessful attempts to negotiate a new collective agreement as the reasons for the shutdown.